Gain insights on business growth in our series of bite size chats with Business Leaders, brought to you by The FD Consultant.
We interview high achieving individuals who we believe everyone can learn from, and who bring insight into the many aspects of successfully growing a business.
Today we welcome Chris Maslin, CEO of Go EO. Go EO helps privately owned businesses become employee owned. Chris is a serial entrepreneur and has previously built other successful businesses in the finance and accounting space.
We hope you find the Q&A with Chris interesting and insightful!
Hi Chris, please tell us about your business.
Go EO - helping companies become Employee Owned.
Founders who want to sell up do this by selling their shares to an Employee Ownership Trust (EOT).
Founders can get fair market value for their shares, without suffering any capital gains tax!
The employees then collectively gain control of the business, and benefit from profits made in the future.
It can be a great way for the founder to step back/exit, empowering the senior team to lead the business forward, and all staff to benefit.
John Lewis is the most famous company in the UK that's been owned this way for approaching a century. It really was a trailblazer! Legislation changed about a decade ago to give benefits to other privately owned firms doing the same.
What are the key factors which have driven your growth to date?
It's a growth industry. Still relatively new, and not that well known. This is however changing, helped by some household names having done it in the last few years, including:
Richer Sounds (hi-fi/electronics retailer)
Aardman Animation (of Wallace & Grommit fame)
Go Ape (aerial assault courses)
Because it's quite novel, to date everything's been relatively bespoke. Expensive advisers with niche knowledge have provided very much tailor made solutions.
As it becomes more mainstream, standard "best practices” are increasingly being adopted. This makes it easier for firms like ourselves to streamline things. Offering standardised options. The same way when you buy a car, they no longer ask how many wheels you want, in the vast majority of circumstances 4 wheels makes sense. In EOT world there are many similar decisions, where one size might not quite fit all, but it fits the majority of standard situations.
What makes you so passionate about what you do?
Having sold what was "my" business to an EOT in 2021, frankly I know how great it is!
Many business owners want to exit their business at some point. Perhaps due to age. Perhaps as they've mentally moved on. Perhaps as they want to cash in on growth to date.
Often business sales involve the business being absorbed into a larger competitor. The brand is lost. Staff may be made redundant. Hence whilst this can give the founder a big cash boost, it's often tainted with guilt!
Selling to an EOT solves this. You can still get a decent pay out. But the business remains independent, and no reason why staff should lose their jobs. Indeed working there should become more appealing, as now the staff have more power (at least collectively), and are also entitled to a share of profits.
What do you view as your greatest achievement in this role to date?
Go EO is still relatively early in its life, so is still finding its place in the market. However it's amazing how quickly most of the other players in the industry got to know about us.
Most aren't threatened. In practice not only is it a growing market, but there's also huge variation in size and complexity of business looking to sell to an EOT. The reality is we're perhaps helping take the "bottom end" of the market, that the other professional advisers may be reluctant to assist due to fee sensitivity.
We've already got a number of partners who are referring work to us for some of their clients. The first few have gone well, clients happy, so we hope this will grow in time.
What are the biggest challenges your business faces?
There are certainly a few!
Firstly, whilst the market is growing, it's not huge. Eg last year there were circa 300 EOT sales in the year. Hence even though there aren't a huge number of businesses serving this market, there's a modest pool of clients.
Secondly, where it's relatively new, it's not that well known. Hence we can often spend a lot of our time explaining what EOTs are all about to clients, before they can then consider whether or not it's right for them.
Thirdly, for the founders that are adamant on getting a top end sales price (there are many reasons why this may backfire!), there can be an element of shopping round advisers until you find the one that will sign off on the biggest figure. Hence if we're not prepared to do that, we may lose out to someone who will.
Fourthly, it's obviously a very significant thing to do. You're selling your company. You can't reverse it once done. Hence it's not something people step into lightly. This means we can have a lot of "tyre kickers", or people who are very interested, but then reveal it's something they'll look to do in 5 years’ time!
What one piece of advice would you give to those who want to achieve or sustain high growth in their businesses?
Whilst it's early days for Go EO, the thing I've done with it that I've also done successfully in previous businesses is systemize things.
To elaborate, by that I mean find a fairly complex process. Work out which are the key bits clients want. If there are multiple options/quirks, consider which can be ignored, and which you can prescribe what the client goes for to make the process easier.
The key thing is we're not aiming to appeal to everyone here. We're aiming to appeal to a big enough proportion of the market to have a viable business.
If we can be the most efficient provider to a decent chunk of clients, we can make it easy for the client and undercut the market, whilst still making a tidy profit.
We hope you found Chris’s Q&A informative and thought provoking. Employee ownership is definitely on the rise, and what a great option for business owners wanting to sell up.
If you'd like to know more about Chris and Go EO, please visit their website.